Finding Opportunity in the Recession: Media Woes Lead to Start-Up Experiments

Of all the industries devastated by the recession, the media has been one of the most notoriously affected. According to the Bureau of Labor Statistics, 65,000 media jobs were cut in 2008—nearly 4 percent of the industry's total. Newspapers are perhaps the biggest loser, with more than 9 percent of jobs eliminated in 2008.

[See 7 Ways to Survive This Jobless Recovery.]

But this industry shakeup could be good news for media entrepreneurs. "Recessions wipe out the old systems and accelerate the new ones," says John Challenger, employment expert at consulting firm Challenger, Gray, & Christmas. But what shape those new systems will take is difficult to predict. Challenger says that despite the economy, there's demand for new media start-ups. "We're in the information age. People want more information now, not less," he says.

[See 10 Products That Boomed During the Recession].

The Internet is an obvious place to fill the information void left by the shrinkage of media jobs. Employment at Internet media companies actually grew last year by 7 percent. Examples of recently created or expanded online-only media companies include the ones that produce the Global Post, Talking Points Memo (which grew from a single blog to an organization), and INDenver Times (formed by staffers from the defunct Rocky Mountain News.) Within the new media realm, growth has been particularly strong for sites dubbed "hyperlocal"—ones that cover small geographic areas in great detail, and often in collaboration with community members.

Jason Sandford, who covers local news in Asheville, N.C., through his Ashvegas blog, says sites like his are in some ways better positioned than local newspapers: The sites "don't have the cost of delivery. They don't have huge personnel costs." But there are also drawbacks. Sandford says it's tough to make money from advertising when readership is limited to a small geographic area.

Sandford's blog, which he launched in 2005 when he was a local newspaper reporter, has mostly been a success. He says the blog started out as an outlet for his personal photography and writing. "I always paid attention to the local news and would mention things here and there. More and more people asked me to take notice of events," he says. These days, he's writing about everything from City Council controversies to area musicians to Asheville's economy. Last year, he left his newspaper job to work for a local alternative weekly, and he's increased his blogging. Ashvegas' traffic has grown from just a few hundred hits a week when Sandford began to an average of more than than 2,000 unique hits a day.

Despite the increase in traffic, Sandford says he is not able to make blogging his sole career. The only income he gets from the blog is through GoogleAds, and that amounts to only a few hundred dollars every three or four months. Sandford is hopeful he can find a business model that works. He plans to experiment with different ways to make money, such as merchandising or partnering with local businesses. Another strategy is based on the strength of numbers—joining up with other bloggers to share revenue. But the "loose confederation" of Asheville bloggers of which Sandford is a part, he says, has not yet figured out how to create a local ad network.

There are blog networks that have found some success through a collaborative business model. Kelby Carr is another former North Carolina newspaper reporter who took a risk by leaving her job three years ago to work as an editor at an online tourism site "People said, 'You can't leave a newspaper to do Web stuff!' It seemed like a crazy move," says Carr. After a year blogging on the side, she decided to become fully self-employed. Carr, a mother of twins, runs a number of sites focused on motherhood issues, including TypeAMom.com. The site uses a network of writers who provide the content, and each gets a share of the ad revenue.